The YOU INVEST RESPONSIBLE balanced fund provides investors with a balanced mix of various asset classes. As part of the YOU INVEST line of products, this particular fund focuses on a highly balanced risk profile and sustainable, ethical selection criteria. 

Turbulent first half year on the markets

The sentiment on the equity and bond markets was clearly down in the first half of 2022. Numerous factors are driving the current affairs at the moment. For example, inflation has increased significantly since the end of last year, which led the central banks like the Federal Reserve in the USA and the European Central Bank (ECB) to take action. In reaction to the drastic increase in inflation, the central banks tightened their monetary policy and heralded the end of low interest rates. The Ukraine war and increasing geopolitical tensions are also burdening share and bond prices.

The situation created by these three factors has increasingly led to concerns about economic growth, which is also reflected in the economic data. The development of the market environment in the second half of 2022 should therefore depend crucially on the path of inflation. Due to strong base effects, experts suggest that inflation might peak in autumn. The development of the Ukraine war from here on out will also remain an uncertainty factor for the rest of the year. Given this context, the risk of a recession is particularly high in Europe at this point in time.

For more information on a regular basis, please visit the investment blog of Erste Asset Management. Here, you can find not only articles and comments on the status quo of the market, but also interviews with experts of Erste Asset Management and interesting facts about funds and investments.

In the exclusive interview below about the first half of 2022, fund manager Gerhard Beulig talks about his assessment of the YTD performance of the fund and his outlook for the coming months.

Interview with fund manager Gerhard Beulig


What sort of performance did the fund achieve in the first half of 2022?

Both equity and bond markets incurred drastic losses in the first half of 2022. Inflation picked up momentum on the back of higher energy prices and a general increase in demand for goods. Central banks have been forced to switch to a clearly more restrictive strategy in order to contain inflation. This led to a drastic rise in yields on the bond markets and consequentially to a decline in the prices of existing bonds. The invasion of Ukraine by Russia massively exacerbated this trend. 

Gerhard Beulig

(c) Photo: Samuel Kreuz

„Most recently, expectations of a weaker economic development due to interest rate hikes have negatively affected the equity markets.”

Gerhard Beulig, fund manager YOU INVEST RESPONSIBLE balanced

In the sustainable equity segment, growth shares have been affected more significantly by the trend of rising yields than the overall market. The earnings of growth companies only start increasing years from the present, which makes them susceptible to changes in interest rates. Most recently, expectations of a weaker economic development due to interest rate hikes have negatively affected the equity markets.


How is YOU INVEST RESPONSIBLE balanced currently positioned? What is your focus in this fund?

We continue to run the fund at 75% of the maximum upper limit of the equity bandwidth as we expect the general situation on the markets to calm in the medium term. In the equity segment, we still largely invest in funds that, in turn, invest globally.

In the bond segment, we keep the interest rate sensitivity relatively low, not the least on the back of money market instruments. Here, corporate bonds (both investment grade and high-yield) complement the largely European government bonds, with emerging markets government and corporate bonds mixed in.


What is the outlook for the fund in the coming months?

For the coming months, we continue to expect comparatively high volatility, since the markets are navigating an environment of concern about inflation and the economy and of restrictive central bank policies. The geopolitical situation and the earnings situation in the corporate sector remain big uncertainty factors. However, the valuation on the equity markets suggests that much of these negative developments is already priced in. If the commodity prices were to ease off, the markets should stabilise.

Government bond yields should at the very least move sideways, which should also take some of the pressure off of the equity markets. Here, too, we expect to see the market forming a volatile bottom. This would come with positive effects in particular in the sustainability area, due to the elevated interest rate sensitivity. The underlying themes of energy efficiency and renewable energies should continue to play a dominant role in the medium term, both on the political stage and, as a result, on the capital markets.

Performance chart since fund inception

Important legal note:

Past performance is not a reliable indicator of an investment’s future performance.


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This document serves as additional information for our investors and is based on the knowledge of the staff responsible for preparing it at the time of preparation. Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund. Please note that investments in securities entail risks in addition to the opportunities presented here. The value of shares and their earnings can rise and fall. Changes in exchange rates can also have a positive or negative effect on the value of an investment. For this reason, you may receive less than your originally invested amount when you redeem your shares. Persons who are interested in purchasing shares in investment funds are advised to read the current fund prospectus(es) and the Information for Investors pursuant to § 21 AIFMG, especially the risk notices they contain, before making an investment decision. If the fund currency is a currency other than the investor's home currency, changes in the corresponding exchange rate may have a positive or negative impact on the value of his investment and the amount of the costs incurred in the fund - converted into his home currency.

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